FSA - Maximum shareholding and joint account regulation

We welcome the opportunity to respond to this consultation. ABCUL is the main trade association for credit unions in England, Scotland and Wales, and our members serve around 80% of Britain’s credit union membership. Credit unions are not-for-profit, financial co-operatives owned and controlled by their members providing safe savings and affordable loan facilities. Increasingly a small number of credit unions offer more sophisticated products such as current accounts, ISAs and mortgages.

We support the measures proposed in consultation CP 12/05 in respect of British credit union regulation being aligned with that in Northern Ireland so that the maximum individual shareholding for a credit union will be £15,000 or 1.5% of total shares (vs. £10,000 or 1.5% at present) and joint accounts may be held by more than two members. We furthermore envisage no potential drawbacks to the proposed consequential amendments, clarifications and updates to the CREDS sourcebook as set out in the consultation paper.

We therefore endorse the proposed changes and welcome the measures’ objective which is to maintain as consistent as possible a regulatory framework for credit unions across the jurisdictions of Great Britain and Northern Ireland. This consistent approach to regulation in the two jurisdictions is entirely in line with ABCUL’s position as expressed in our response to the consultation around provision for the transfer of regulatory responsibility for credit unions in Northern Ireland to the FSA.